New ways to engage customers in co-designing your company's future - a weblog to complement the book, Outside Innovation, by Patty Seybold

Description

What is Outside Innovation?

It’s when customers lead the design of your business processes, products, services, and business models. It’s when customers roll up their sleeves to co-design their products and your business. It’s when customers attract other customers to build a vital customer-centric ecosystem around your products and services.
The good news is that customer-led innovation is one of the most predictably successful innovation processes.
The bad news is that many managers and executives don’t yet believe in it. Today, that’s their loss. Ultimately, it may be their downfall.

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Observations

LEAD USERS

Eric von Hippel coined the term "lead users" to describe a group of both customers and non-customers who are passionate about getting certain things accomplished. They may not know or care about the products or services you offer. But they do care about their project or need. Lead users have already explored innovative ways to get things done. They're usually willing to share their approaches with others.

LEAD CUSTOMERS

I use the term "lead customers" to describe the small percentage of your current customers who are truly innovative. These may not be your most vocal customers, your most profitable customers, or your largest customers. But they are the customers who care deeply about the way in which your products or services could help them achieve something they care about.

LEAD CUSTOMERS AND LEAD USERS

We’ve spent the last 25 years identifying, interviewing, selecting, and grouping customers together to participate in our Customer Scenario® Mapping sessions. Over the years, we’ve learned how to identify the people who will contribute the most to a customer co-design session. These are the same kinds of people you should be recruiting when you set out to harness customer-led innovation.

HOW DO YOU WIN IN INNOVATION?

You no longer win by having the smartest engineers and scientists; you win by having the smartest customers!

CUSTOMER CO-DESIGN

In more than 25 years of business strategy consulting, we’ve found that customer co-design is a woefully under-used capability.

June 13, 2014

Will Customers Regain Control Over Their Lives?

I began thinking last week about all the ways in which the world seems to be spiraling out of our control. No matter how “together” or successful people are, we all seem to be deeply troubled by a number of seemingly inexorable trends that leave us all feeling quite powerless. The fact that a 700-page economics book rocketed to #1 on the bestseller list is a great indication that many people feel that something has gone profoundly wrong. Thomas Piketty’s book, Capital in the 21st Century, brilliantly articulates why income inequality is so great, why the gap is widening and why it is unsustainable. I have been delighted by the airtime and buzz this book and this author have received. This is a topic that is near and dear to my heart, and, it now appears, it’s one that has been troubling a lot of us.

The popular uptake of Piketty’s book is just one of many signs that lead me to believe we are on the cusp of another big shift in the power structures that are in play in many of our fundamental systems. Another indicator is the unsustainable amount of total debt that we are carrying as a society. Not just our national debt, nor our personal debt, but the total debt per capita—if you add it all up: national, corporate, municipal, personal, etc. In the U.S., the total debt we’re currently carrying comes out to $600,000 for a family of four. That’s $150,000 for every man, woman, and child. It’s unsustainable. We can’t get the economy going again by lending more money to consumers or businesses. We need to forgive a lot of this debt to get back to productivity. (This is all explained, quite well in my husband, Tom Hagan’s blog post, entitled “How Much Crop Can a Sharecropper Share?”)

So, as I thought about the structures of the systems that dominate our living conditions, I realized one basic truth: none of them place the needs of customers/users/citizens/patients at the center (or at the top). The ecosystems that are the most broken are the ones in which some other major players are calling the shots and the customers are being ignored. That imbalance won’t last forever. We’ve been through revolutions before. The last “customer revolution” occurred in the early 2000’s, precipitated by the Internet and the Web. We’re due for another one!